The foreign ministers of both Gulf states spoke at an extraordinary general meeting of the Arab League at its Cairo headquarters, called by Riyadh.
The meeting comes as tensions soar between regional arch-rivals Saudi Arabia and Iran, including over League member Lebanon.
Sunni Muslim powerhouse Saudi Arabia and Iran, the predominant Shiite power, have for decades stood on opposing sides of conflicts in the Middle East including in Syria and Yemen.
Saudi Foreign Minister Adel al-Jubeir warned Iran that Riyadh "will not hesitate to defend its national security to keep its people safe", in opening remarks at the meeting.
Riyadh called the ministerial meeting to discuss "violations" by Iran after a missile was intercepted near Riyadh in a November 4 attack claimed by Shiite Huthi rebels in Yemen.
In a resolution, the League issued a "strong condemnation" of this incident, saying it was "blatant aggression against the kingdom and a threat to Arab national security".
The League ministers affirmed Riyadh's right to defend its territory and said they would support all legitimate procedures it night take "against these Iranian violations".
They also tasked "the Arab group in New York to address the security council president to clarify Iranian violations" of a UN Security Council resolution on Tehran's ballistic missiles programme.
Bahrain's Foreign Minister Sheikh Khalid bin Ahmed Al-Khalifa said the Shiite Hezbollah movement in Lebanon was "in total control" of the country.
"Iran's biggest arm in the region at the moment is the terrorist Hezbollah arm," he said.
He added that Hezbollah "does not just carry out operations inside the borders of (Lebanon), it also crosses its borders to all of our nations", making it "a threat to Arab national security".
- Hezbollah a 'terrorist party' -
"The Lebanese Republic, in spite of our relations with it as a brotherly Arab nation... is under the total control of this terrorist party," Sheikh Khalid said.
In the resolution, the Arab ministers said they would hold "the terrorist Lebanese Hezbollah... responsible for supporting terrorism and terrorist organisations in Arab countries with modern weapons and ballistic missiles".
Arab League chief Ahmed Abul Gheit said Lebanon was among the countries that voted in favour of the resolution, except for the points in which Hezbollah was mentioned.
Lebanon's foreign minister did not attend Sunday's session, but Beirut's permanent representative was present.
The ministers also condemned a pipeline fire in Bahrain on November 10, calling it "a terrorist act by a group supported by Iran and the Iranian revolutionary guard".
Abul Gheit also directed strong words at the Islamic republic.
"There are proven incidents of spying networks and sabotage whose destructive actions were uncovered" including in the United Arab Emirates, Egypt, Saudi Arabia, Bahrain, Jordan, Morocco and Sudan, said the Arab League chief.
"And there are proven incidents of support and financing of armed militias in more than one place in the Arab world," he added.
Saudi Arabia's powerful Crown Prince Mohammed bin Salman has accused Tehran of "direct military aggression" against the kingdom by supplying the Yemen rebels with ballistic missiles. Tehran has denied any involvement.
Bahrain and the UAE supported the Saudi request for the extraordinary meeting, which was also approved by Djibouti, the current chair of the pan-Arab bloc, according to a memorandum seen by AFP.
Saudi-Iranian tensions have escalated over Lebanese Prime Minister Saad Hariri's shock resignation, also on November 4, in a statement from Riyadh in which he cited Iran's "grip" on his country and threats to his life.
Hariri said Saturday he would return to Lebanon from France for Wednesday's Independence Day celebrations, but on Sunday he said he would first visit Egypt.
"I will head to Egypt on Tuesday to meet my friend, President Abdel Fattah al-Sisi," he wrote in a tweet.
A source close to Hariri said the Cairo meeting aimed to "continue the series of Arab and international consultations".
Hezbollah leader Hassan Nasrallah is set to give a speech Monday at 6:00 pm (1600 GMT) on the crisis in Lebanon and tensions between Riyadh and Tehran.
For more than a decade, Lebanon's political class has been largely split between the Iran-backed Hezbollah and its allies, and a Saudi-supported coalition led by Hariri.
In Syria, Hezbollah has fought to defend the government of President Bashar al-Assad, also an ally of Tehran.